“Given the evolving nature of crypto assets and the differentiated financial regulatory architecture in different jurisdictions, it may not be possible for all jurisdictions to adopt a common regulatory approach or accommodate them under existing laws,” read the submission by Vidhi Centre for Legal Policy (Vidhi) to a public consultation floated by the Financial Stability Board (FSB). The submission said that FSB’s recommendations state that national authorities must have a “comprehensive” framework for regulating crypto assets and stablecoins but it may be challenging for authorities to “pigeonhole” all crypto assets under a single asset class. Vidhi added that reliance on existing laws to regulate crypto assets in certain cases will lead to “under-regulation of the sector”. It urged FSB to offer pointers on how authorities can design their regulatory approaches and where there may be a need for a “bespoke” regulatory framework. What is the Financial Stability Board (FSB): It is an international body that monitors and makes recommendations about the global financial system with a mandate to maintain financial stability. The consultation was floated by the FSB on October 11, 2022, with a view to invite feedback on questions concerning the regulation, supervision and oversight of crypto asset activities and stablecoins. You can read the consultation here. Why it matters: It is important to note Vidhi’s submission because it offers a good reference point to Indian legislators on what they need to keep in mind while coming up with a regulatory framework for India. The country, on its part,…
